www.stratexinternational.com
Stratex International is an exploration and development company focusing on gold and high-value base metals. The company objective is to be a leading-edge and innovative explorer whilst creating revenue from gold and base metal production via well-managed joint-ventures.
Since formation, Stratex has rapidly amassed a portfolio of high-potential exploration licences in Turkey and Ethiopia, primarily focussed on gold.
Stratex International: Centamin's acquisition of Sheba is positive for company - broker
Centamin's (LON:CEY) £7.48 million offer for PLUS-listed Sheba Exploration is an endorsement that Stratex International (LON:STI) is exploring in very prospective areas, according to broker FoxDavies.
The broker retains its "buy" recommendation for Stratex targeting a price of 12.5 pence per share (current price: 8.23 pence).
Stratex holds a 4.94 percent stake in Sheba and sees the acquisition as a thumbs up for its own prospects in Ethiopia, where it is highly active.
As well as the 4.94 percent stake, Stratex has a binding LOI agreement with Sheba to evaluate the Shehagne gold prospect on the Arabian Nubian Shield (ANS) in northern Ethiopia - and also a new grassroots exploration programme for gold and base metals in the contiguous Tigray Exclusive Exploration Licence (EEL).
It is the Arabian Nubian Shield area that has caught the attention of Centamin, says FoxDavies, and its proposed acquisition will include Sheba's interest in the Shehagne project.
Stratex is currently completing a work and expenditure programme on Shehagne to earn 60 percent, with the right to increase to 80 percent.
"The good news for Stratex is that the agreement currently in place with Sheba is legally binding, and barring any unforeseen action by Centamin to challenge this, should still stand.
"Stratex has just over 2 months to complete its obligations for the buy in and they are mobilising a rig to the site as we speak, which should be turning by early August on a 1000m programme.
"We think that this is a fairly tight timeline and have our fingers crossed that the drilling programme will be trouble free," said the broker.
At the very least, says the broker, Stratex has another endorsement that it is in very prospective areas and continues to hold ground in the ANS through its interest in the Abi Adi , Berehale and Tigray projects.
"Also, Stratex originally bought into the deal for £40,000 in August 2009 and this deal will value Stratex’s share at approximately £616,000 - a healthy 14 times increase in value in a little under 24 months," it added.
